Track2Realty: Responding to Finance Minister P Chidambaram’s suggestion for reducing the price of housing stock, Confederation of Real Estate developers’ Associations of India (CREDAI) has asked its 8,000 plus members across the country to seriously consider the proposal to sell in maximum numbers.
The governing council of CREDAI met at Kochi over the weekend took on record Chidambaram’s suggestion to sell maximum number of housing units by reducing the prices to the extent possible.
CREDAI National President Lalit Kumar Jain said the developer community is willing to consider the suggestions made by the Finance Minister to unlock the value of the unsold stock. “But at the same time, we request Mr. Chidambaram and the Government of India to look into the suggestions made by CREDAI to revive the real estate industry to rejuvenate the economy slow down,” he said.
“We are happy at the positive manner in which the Finance Ministry has mooted proposals to help the developer community. We are confident that the Ministry will also positively respond to the various constructing suggestions made by CREDAI like single window system of clearances to speed up the process, ask banks to reduces rates of interest for projects and buyers as well and create a congenial atmosphere to encourage affordable and mass housing,” Jain said.
CREDAI has already suggested a ten-point agenda to the government, involving the developers, to put the economy back on the growth highway:
1. Target Housing Nation Surplus and Slum-Free India by 2020: Also office space supply to be increased manifold with subsidies to keep cost of business under control on lines of IT & ITES space.
2. Declare Housing sector as infrastructure/Industry and affordable housing as priority Industry;
- Offer concessional rates of interest and liberalise FSI rules – Home Loans at 5% for LIG, EWS and 7 % for others; Project finance at 9%; roll over/COD facility at par with Industry.
3. Tax Exemptions:
- Device special affordable housing scheme with Income Tax, Service Tax and VAT exemption, similar weighted effect to be given in GST.
- Stamp duty to be included in GST;
- Special promotion of Rental housing projects with all rental income in affordable sector should be tax free and consider the rental housing stock as capital.
- Slum Redevelopment schemes to be tax exempted at par with Affordable housing Schemes.
- Green Buildings to be given tax rebate post completion and green building certification by any agency(TERI/IGBC etc)
- Slum Redevelopment; Real time eligibility for all residents of existing slum on date of commencement of work; transparent mechanism and eliminate role of slum lords/local politician in redevelopment process by not asking for 70% consents.
4. Comprehensive Reforms/Administrative reforms,
· Single window clearance for building approval; Streamline multiple levels of clearances, human interface that leads to corruption
· E-Governance: Land, Administrative, Banking & Tax 100% E Governance in urban Contracts, Audit through big 10 firms.
· Environment, Aviation ,Defense and Archeological requirements to be standardized and incorporated in Development Rules and development plan
· Mind set reforms: special campaign for political leaders and bureaucrats to support/accelerate growth, remove impediments;
ii. Land Reforms Increase FAR above 5 to make urban infrastructure viable and land cost to be lower as well as protect environment and agriculture by restricting horizontal expansion.
5. Black Money elimination: Voluntary Disclosure Scheme to covering government officials and politicians, and provision for stringent prohibitive regulations.
6. Green Building; 10% tax cut in Income Tax post completion for certified Green Buildings.
7. Technology for speedy construction and Green Buildings:
- Technology; No import duty on specified equipment and form work for 3 years; Special incentive for establishing import substitute manufacturing units and faster construction technology.; no excise on prefab and such construction elements. Special incentive for energy neutral/reduction and zero discharge buildings.
8. Comprehensive Realty Regulator: To have directional powers to cover all stake holders. No discretionary stoppage of work after granting approval for commencement without hearing by regulator/civil court. Documentation to make developers/authorities/buyers accountable.
9. Skill Development; special incentives/fiscal support to speed up and improve quality skill development required to create professionals and skilled labour for Real Estate and construction.
Jain also requested the Finance Minister to convene a meeting with all concerned ministries and officials, and RBI, to discuss these points and arrive at workable solution with targets for implementation.
